Friday, January 25, 2013

Wait a Minute, What? (National Identity Dept.)

Kenneth Rogoff, discussing our fiscal challenges, says "The US remains an incredible franchise..." (Financial Times, paywalled).Wait a minute, what? Now we are a brand, like American Express or Saralee or the Green Bay Packers--one more locus for a network of IP contracts? Let me think about that..

[And while thinking, I suppose I should go back and reread Monroe Price's prescient paper, The Market for Loyalties: Electronic Media and the Global Competition for Allegianceslink.]

1 comment:

Am I allowed to observe that Rogoff has now fully transitioned from chess player to corpse:

"memories of the huge inflation of the 1970s and default on gold clauses in the 1930s"?

You and I remember the 1970s; we are, to be nice about it, above the U.S. median age. Not that there is anything wrong with that.

(As with the Sixties, apparently if you actually remember the 1970s, you cannot now be considered to have lived through them--the inflation record for that period for the US is rather better than Rogoff remembers, though to be certain a good portion of the real growth for the period is due to being an oil "producer" (read: able to dig it out of the ground, though see Andrew Rickard's comment a few days ago as a cautionary tale).

I have one living relative (she played profesional baseball in the 1920s) who probably remembers the "default" on gold clauses in the 1930s--one can only assume Rogoff means the lead-up to the official price of gold in the US going from $20.67 to $35/ounce, since he didn't mention it at all before that final 'graf. For most of us Of A Certain Age, the price of gold has always been at least $35/ounce. For the median US age, in fact, it has probably always been higher than that, since we've been off the gold standard completely for, what, forty years?

Just checked, the median age in the US per the 2010 Census was 37.2 years (p. 4)--at least half of the people living today have never lived under the gold standard at all.

In fairness, Rogoff suggests he agrees with David Graeber that the US defence budget may be so high as it is because we are extracting "tribute" from other countries ("if the US were ever forced to surrender the mantle of world policeman...foreigners may no longer have quite the same desire for its debt"), but since this is in the context of an argument that seems to be "we need to spend more on the War Department even though we spend twice as the general average as percent of GDP," it's difficult to credit him for that either.

Shorter Rogoff: we cannot cut military spending, we should be investing in infrastructure now, health care is going to be an issue--look, There's The Gold Standard! Watch me wave a flag!